Estate of Marion P. Bradford, Deceased, Lizette L. Pryor, Executrix - Page 24

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             create an ambiguity as to whether the death taxes are to be              
             paid out of the probate residuary or the trust residuary,                
             and as to whether decedent intended to apportion taxes.                  
             Thus, the estate contends that the North Carolina                        
             apportionment statute applies in this case.                              
                  Respondent contends that under the decedent's will                  
             and trust, death taxes are payable from the decedent's                   
             residuary probate estate without apportionment or, to the                
             extent that such assets are not sufficient, from trust                   
             property before such property is allocated to the                        
             charitable beneficiary.  Accordingly, respondent contends                
             that the decedent's death taxes reduce the property                      
             available for distribution to the charitable beneficiary                 
             and, thus, reduce the amount of the estate's charitable                  
                  According to respondent, paragraph 1.02 of the                      
             decedent's will clearly opts out of the North Carolina                   
             apportionment statute by providing that death taxes "shall               
             be paid out of * * * [the decedent's] Residuary Estate as                
             an administration expense and shall not be charged against               
             or recovered from any recipient or beneficiary of the                    
             property taxed".  Implicit in respondent's argument is the               
             assumption that if the decedent's will provides a method                 
             of apportionment of the tax that differs from the method                 

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Last modified: May 25, 2011